Notes:
Note 1. Profit Level
The Profit Level you select needs to be realistic.
For Example a Proprietor’s Profit Level (PEBITDA) (this is profits BEFORE the owners personal takings and personal wages) will match to a lower Multiplier than EBITDA would.
Example 2: EBITDA Profit Level (This is profits after the owners personal takings and wages) will match to a higher multiplier than PEBITDA would.
PEBITDA: Proprietor’s Earnings Before Interest, Taxation, Depreciation and Amortisation. ( Proprietors Earnings is the profit before owners takings – including owners wage)
EBITDA: Earnings Before Interest, Taxation, Depreciation and Amortisation ( Earnings is the profit after all wages, including the owners wage)
Note 2. Multiplier
You are selling your future profits / earnings. The multiple selected should reflect the number of years, or part thereof, of the future profits you think a perspective buyer will pay for the risks associated with earning your future profits.
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